Study Shows It Pays to Be a Digital Leader

December 8, 2016

Reprinted in part from SAP August 30, 2016 release

Only one in five business executives is a Digital Leader, a new study conducted by Oxford Economics and sponsored by SAP shows. A new class of leaders is emerging that embraces a digital mind-set and reports stronger business outcomes as a result.

The Leaders 2020 study is based on survey results from more than 4,000 executives and employees in 21 countries. The research identifies the characteristics of organizations that are succeeding in the digital economy. The majority of organizations could benefit from adopting the digital leadership practices identified in the research.

Here’s why it pays to be a Digital Leader:

Stronger financial performance: Seventy-six percent of executives characterized in the study as Digital Leaders report strong revenue and profit growth, compared to 55 percent of all other executives surveyed.

Satisfied and engaged employees: Digital Leaders have employees who are more likely to be satisfied (87 percent) at their work, compared to 63 percent of all other respondents.

An inclusive culture and strong leadership pipeline: Digital Leaders have employees who are more likely to stay in the job even if given the chance to leave, 21 percentage points higher than all other respondents.

According to the study, today’s Digital Leaders:

Simplify decision making

Four out of five Digital Leaders make decisions that are data-driven, and nearly two out of three report that their organizations are capable of making decisions in real time, compared to only 55 percent and 46 percent respectively of others surveyed. Digital Leaders are more likely to be transparent and to distribute decision making throughout the organization.

Prioritize diversity and inclusion

Organizations leading in the digital economy are more likely to see more diversity in the workforce at mid-level management, and have a higher proportion of female employees than other companies. These companies are also more likely to have diversity programs (46 percent versus 38 percent of all companies), recognize diversity’s positive impact on culture (66 percent versus 37 percent) and equate increased diversity to financial performance (37 percent versus 29 percent).

Despite some organizations outperforming their peers in this category, the study found room for improvement among all levels of leadership. Only 39 percent of employees believed their company has effective diversity programs in place, while less than half (49 percent) of executives believe that leadership recognizes the importance of diversity, and has taken steps to develop it.

Listen to younger executives

The study found that millennials are quickly occupying corporate leadership positions, as 17 percent of the senior executives in the study are classified as millennials. Millennial leaders are more pessimistic than other executives about their organization’s digital readiness. These younger executives ranked their organization’s leadership skills between 15 and 23 percentage points lower than non-millennial executives across a variety of attributes, including facilitating collaboration, managing diversity, providing feedback and discouraging bureaucracy. Millennials will soon make up 50 percent of the workforce, so they will have a powerful voice to shift corporate culture. What they say really matters.

And they are saying: Time for change.

Want more?

To learn more about the study and see how you can become a Digital Leader, click here.

About AKT View

At AKT, we pride ourselves in being technologically innovative and thought leaders. Our blog offers fresh ideas and insights on digital HR from our global experts, to help you keep ahead of the curve.

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